Privatization

Nevada’s policymakers are scared. The power crisis in California has made the Silver State’s governor, legislators and energy bureaucrats fear voters’ response to a possible Golden State-style electricity debacle in Nevada. But instead of biting the bullet and pushing for the tough but enlightened steps that will avert runaway electricity prices and rolling blackouts, most of Nevada’s decision-makers are leaning toward measures that will roll back deregulation. Their behavior is disturbing, because in the long run, the Silver State is well-positioned to benefit from electric choice. Regardless of whether Nevada embraces or shuns deregulation, the short term will surely bring higher prices for ratepayers—and political risk for politicians. But if the Silver State forges ahead with deregulation and implements all or most of the steps described herein, Nevada can weather the West’s power storm and thrive in an electricity market controlled by buyers and sellers, not politicians and bureaucrats.

The train purchased by Amtrak to reestablish connection between Las Vegas and Los Angeles is finally in service. There’s only one problem: It’s serving the residents of Seattle and Vancouver. The plan to link Las Vegas to Los Angeles with a Talgo train is behind schedule, and Amtrak has allowed its Seattle-to-Vancouver route to borrow the vehicle. Yet despite this latest Amtrak failure, many officials from Southern Nevada’s public and private sectors continue to believe that taxpayers should fund the costs of connecting Southern Nevada and Southern California by rail. Herewith, a look at how Amtrak fleeces taxpayers, and an overview of the problems with a much-hyped “superspeed” train that might be built between Las Vegas and Los Angeles.

Last month President Clinton signed a bill which authorized the sale of 6,500 acres of federally controlled land in Ivanpah Valley to Clark County. The county plans to use the land to build a new airport. With a target opening date of 2009, the facility will serve cargo carriers and charter flights, and reduce demand at McCarran Airport, which is scheduled to reach its passenger capacity in 2010. Yet the most promising tool to improve air travel in Nevada remains largely overlooked by transportation planners: privatization. Herewith, and examination of airport-privatization successes elsewhere, and a look at how market-oriented reforms can ensure that Nevada’s airports meet the needs of customers, not politicians.

Governor Kenny Guinn’s recent attempt to privatize health services in Nevada’s prisons terrified medical workers at the Silver State’s government-run correctional facilities. The State of Nevada Employees Association declared all-out war on the proposal, a largely sympathetic media toed the union’s line, and legislators of both parties either ignored or demonized the notion of privatized health care in Nevada’s prisons. In what came as no surprise to close observers of Nevada’s political scene, when the legislative session concluded the governor’s privatization proposal was dead. But when compared with the nation’s undeniable privatized-corrections trend, Guinn’s plan to allow companies to take over medical services at Nevada’s prisons was quite modest. Privatized prison construction and operation have been adopted by the federal government and a growing number of states—and studies clearly show that corporations can both build and manage correctional facilities more cheaply than the public sector.

Against a background of a $150 million shortfall—largely a legacy of former Governor Bob Miller’s largess to his liberal cronies and special interests—Governor Kenny Guinn has put state agencies on notice that their bottom lines will be scrutinized, waste will be eliminated and privatization, where possible, will be employed. There is nothing like practicality and need to drive policy objectives. But how practical is a state-level privatization program? How can one be implemented without causing public employees and teachers to feel threatened? Are there any other states that have gone down this road before so we might learn from their successes—and more importantly, their errors?

Saving money without compromising services ought to be a chief concern of school administrators. To help channel more resources into instructional programs, school administrators are increasingly turning to the efficiencies of the private sector for services such as public transportation, facilities maintenance and cafeteria operations.

As casino gambling sprouts up across the United States—and a number of indicators suggest fewer tourists are vacationing in Nevada—the need for economic diversification of the state’s one-industry economy has received renewed interest.

In 1997, Amtrak discontinued the Desert Wind, its route between Los Angeles and Salt Lake City. This decision meant rail service between Las Vegas and Los Angeles was no longer available. But that will soon change, with a new route which directly links the two cities. Funded in part by Southern Nevada casinos, it will shuttle passengers between Las Vegas and L.A. in Spanish-built Talgo trains. Many casino executives and politicians have high hopes that the new rail route will alleviate traffic congestion on I-15. However, reality flies in the face of this assumption. Trains now carry a minuscule portion of American travelers, and despite the shorter trips Talgo trains provide, they are unlikely to lure Vegas-bound gamblers away from their cars. Furthermore, America’s nationalized passenger rail service is a fiscal disaster. Rather than seeking for ways to prop up Amtrak with "public-private partnerships" such as the one currently at work in Southern Nevada, Congress should privatize the service completely, or defund it altogether.

The Department of Energy continues to investigate whether Yucca Mountain is a viable location to store the high-level radioactive waste (HLRW) produced by America’s commercial nuclear reactors. Nevada’s elected officials, fully aware that their political lives depend on resistance to the Yucca Mountain Project (YMP), continue to fight the proposal. The rhetoric they employ to oppose the YMP usually features apocalyptic scenarios—fantasies of terrorist attacks or cataclysmic volcanic eruptions. It is unfortunate that YMP foes rarely advance the free-market argument that the federal government should not be responsible for disposing of waste generated by for-profit corporations. Events in Utah may bring attention to this oversight—a possible interim storage facility in the Beehive State suggests that the HLRW problem does not require a government-dominated solution.